Are consultants equipping themselves with RI knowledge?
The opportunity has been clear for financial advisors and planners armed with responsible investing knowledge for some time.
In RIA’s 2021 Investor Opinion Survey, which focused on individual investors, 77% of respondents said they want their financial services providers to inform them about RI investment opportunities that align with their values; However, only 27% said they would ever be asked if they were interested, and almost a third said they currently have RI products in their investment portfolio. And in a previous version of the survey conducted in 2020, 75% of respondents expressed interest in getting an RI option from their financial services provider, but only 28% said they had been asked.
“We are also seeing new guidelines, like the Investment Industry Regulatory Organization of Canada, which encourage advisors to incorporate questions about their clients’ personal values and ESG preferences into their KYC processes,” says Fletcher. “Our hope is that this will turn into best practice for consultants.”
Last year, the RIA also conducted an advisory opinion survey, which found that advisors’ knowledge of ESGs and responsible investing were lagging behind. While 85% of survey respondents said they were very or somewhat comfortable initiating a conversation about responsible investing, a fifth of advisors rated their RI knowledge as excellent or very good, according to Responsible Investing. Out of the 10 statements given about , three did not correctly identify the correct statements. ,
During the pandemic, ESG issues have become increasingly common among the general population, and concerned people are making their way into consultant-client interactions. If investors find they can help them make a difference without compromising their returns or financial goals, Fletcher believes it’s best for advisors to enhance their abilities in providing RI advice. would be a powerful catalyst.